Apple Board mods Tim Cook’s pay package to be more performance-based

According to a new filing with the SEC this afternoon, Apple’s Board of Directors has elected to modify Tim Cook’s payment package he was awarded in 2011 after being promoted to CEO. The change, which apparently came at Cook’s request, takes the one million restricted stock units he was set to receive over the next 10 years and makes the compensation more performance-based…

In the documents, Apple says that it is changing the way it divvies out bonuses in future deals with its top executives after having in-depth discussions with many of its largest shareholders. And it commends Cook for “leading this initiative by example,” saying that the CEO pushed the company’s Directors to add more risk to his pay package and that he has the “full support of the Board.”

MacRumors shares an excerpt from the filing:

“Under the adopted modification, Mr. Cook will forfeit a portion of the 2011 CEO equity award, which was previously entirely time-based, if the Company does not achieve certain performance criteria. While the Committee generally believes that a performance-based award should have both a downside and an upside component, at Mr. Cook’s request, the modification does not contain an upside opportunity for overachievement of these criteria. As a result of implementing a modification with only downside risk, the Committee has determined that a portion of the original grant should vest earlier than originally scheduled. This modification will not change the award’s original value for accounting expense purposes.”

The original award would have given Cook 500,000 shares of Apple stock in August 2016, and another 500,000 in August 2021—regardless of the company’s success. At the time the shares were granted, they would have been worth $376 million. And when Apple’s stock peaked in the fall of 2012, they were worth $705 million. Today, after a staggering 40% slide, they’re worth $413 million.

But with the new amended package, Cook will get 100,000 shares in August 2016, another 100,000 in August 2021, and the remaining 800,000 in ten equal allotments over the next 10 years. And in order for him to get the 80,000 share annual award, the Board will look at Apple’s total shareholder return and compare it to other companies. If Apple is in the top third, he gets the stock.

The details can really get confusing, but if you’d like to know more about the modifications made to Tim Cook’s pay package, you can view the full 8-K filing here. The bottom line is that Cook wants people—both Apple shareholders and employees— to know that a big chunk of his paycheck moving forward will depend on how well Apple does in their marketsand on Wall Street. Interesting.

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Pegatron CEO says Apple’s budget iPhone won’t be ‘cheap’

Speaking at his company’s shareholders meeting on Thursday, Pegatron CEO T.H. Tung made some interesting comments on Apple’s often rumored ‘budget iPhone.’ He said don’t expect the handset to be inexpensive, as the “price [on it] is still high.”

For those unfamiliar with Pegatron, it’s a manufacturing company and one of Foxconn’s biggest rivals. The CEO’s comments seem to confirm earlier reports that Apple has chosen the company, over Foxconn, as its primary budget iPhone maker…

Japanese blog Macotakara (via AppleInsider) points to Tung’s comments in a report by the China Times. The news outlet says that the executive told investors today that products currently on the market can carry a number of names, but “cheap” is not how he would describe the low cost iPhone. He went on to say that smartphones are increasingly offering more value for the money.

This isn’t the first time that we’ve heard Apple’s budget handset characterized as “not cheap.” Last month, AllThingsD shared a note from analysts Gokul Hariharan and Mark Moskowitz saying they felt Apple’s low cost iPhone could come in at $350.

“We believe Apple could take 20-25 percent of this market in the next 12 months (from almost no market share currently), if it prices a lower-priced product at $350-400 levels.”

And I don’t think it would surprise anyone to see Apple price its so-called low end iPhone at $350 or higher. Apple doesn’t typically undercut its competitors on price. Just look at the iPad mini—people thought Apple was nuts for starting it at $329.

I think this comment Tim Cook made while speaking at this year’s Goldman Sachs Technology and Interactive Conference sums it up best:

“Our North Star is making great products. We wouldn’t do anything that’s not a great product. It’s not why we’re on this earth.

We wouldn’t do anything we don’t consider to be a great product. That’s just not who we are. That said, if you look at what we’ve done for people who are price sensitive, we’ve lowered the price of the iPhone 4 and 4S as of last September, and last quarter we didn’t have enough supply of the iPhone 4. It surprised us.

Also take a look at the history of iPod. When we started, it was $399. Now you can get an iPod shuffle for $49. Rather than cheapening, we build new products with a separate experience.”

There’s been a lot of talk about Apple offering a budget iPhone in recent months. Just last week, Reuters ran a report claiming that it was on track to release the cheaper handset this fall alongside its iPhone 5S, and test production was going to start in July.

As for the phone itself, it seems like we have a pretty good idea of what it’s going to look like. It’ll be shaped like the iPhone 5, with the curved corners and other elements of the iPod touch. And several reports have said it’s going to come in a variety of colors.

There’s obviously no way to know for sure, but many industry insiders and pundits are expecting Apple to launch the low cost handset alongside a new flagship iPhone, the 5S, and two new tablets this fall. Like last year, it’s going to be a busy holiday season.

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WhatsApp to bring subscription model to iOS this year

WhatsApp, the popular cross-platform messaging service, is going to be bringing its subscription model to iOS this year, according to CEO Jan Koum. Koum recently spoke with a Dutch news outlet about the company’s near-term plans.

Currently, iOS users can download WhatsApp for a one-time fee of $0.99. In the new model though, which it already uses on other platforms like Android and Windows Phone, the app will be free, with users having to pay an annual fee…

TechCrunch points to Koum’s interview with Dutch journalist Alexander Klopping onTechtastic:

“The new subscription model would apply to new users, Koum said, and would likely follow the same pricing structure as its other apps, which are free for the first year and then cost $1/year, compared to the single, for-life $0.99 purchase that users make on iOS today. “We’re relaxed on dates, but definitely this year. It’s on the road map,” Koum said.”

WhatsApp is easily one of the most popular messaging services around, with a reported 17 billion messages transmitted everyday—some 7 billion inbound and 10 billion out. And it’s believed it has over 100 million users on Android alone.

Koum wouldn’t give a reason for why they’re moving to subscriptions, but it’s not a difficult one to figure out. Users download, on average, 15 free apps for every 1 paid app. Which route would you take while trying to grow a user base?

He also wouldn’t give a timeframe for the change outside of “this year,” but it looks like it’s going to be sooner than later. The phrase ‘Purchase Now’ for renewing iPhone subscriptions was found in WhatsApp’s crowdsourced translation site.

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